Real estate magnate and Quicken Loans founder Dan Gilbert expanded his portfolio to some 70 properties today with the purchase of 43 story, 957,000 square foot One Detroit Center. The purchase price was more than $100 million for Detroit’s third largest office building and the adjoining garage, however, an exact number wasn’t shared.
But that wasn’t all.
It had been talked about in the media that Ally Financial, formerly the credit arm of General Motors, was going to move to Southfield, but those plans are no more. New CEO Jeffrey Brown stood up today on stage along with Quicken Loans founder Dan Gilbert, Bedrock Real Estate CEO Jim Ketai and Detroit Mayor Mike Duggan to say that not only were they not moving to the suburbs, but all of their 1,500 employees at Ally would be consolidated into One Detroit Center (which is now to be called Ally Detroit Center) come next spring.
“Ally was pen and paper close to signing and going out of the city. We put out an all-court press,” Dan Gilbert said. “We had the space. They had a need. I think deep down they wanted to stay.”
It’s expected the buildout of the 13 floors Ally Financial will take up will cost about $55 million.
The deal ended up coming together in an interesting way. Mayor Duggan became aware of the media reports that Ally, after being based in the city for about a century as part of GM, would be moving to the suburbs. He asked for a two week window to make his case for the city, and even though CEOs changed in the middle of the process, between the Downtown Development Authority, Ketai and Gilbert the funding and arrangements were made not just for the building purchase but also for the purchase of the adjoining garage as also 1,500 parking spaces were needed.
“We need to get used to the idea of success in Detroit,” said Mayor Mike Duggan.
The lease is 12 years and 9 months long, and totals 321,000 square feet in the newly renamed building. Cost, however, wasn’t the driving factor. Downtown desirability was.
“It is more expensive for the company to stay in the downtown Detroit area, but when you consider all of the other qualitative factors, the access to talent, high speed fiber to be laid in the city, to be a part of that development, the benefits far outweigh the costs on the spreadsheet,” said the CEO of Ally Financial, Jeffrey Brown.
This appears to be a market rate purchase for Bedrock of an already viable building, which is a departure from the “skyscraper sale” days of the past.
Ally Financial was formerly GMAC (General Motors Assurance Corporation) and owns the profitable Ally Bank which was at one point majority owned by the Federal government as part of the massive auto bailout. In December the government sold their last remaining shares.